Saturday, October 5, 2024
spot_img
spot_img
HomeNewsGlobal NewsFCA sets out steps to improve access to bank accounts - help...

FCA sets out steps to improve access to bank accounts – help UK finance sector thrive

  • In a new report, the FCA encourages account providers to do more to support those who want a bank account but don’t have one.

LONDON, England – The Financial Conduct Authority (FCA) has recognised that banks, building societies and payment firms are trying to support customers to access accounts and is encouraging them to build on examples of existing good practice, such as working with homeless charities to tailor their support to the needs of customers in vulnerable circumstances.

Banks and other account providers have been urged to increase awareness of basic bank accounts, which allow people to make and receive payments but without the availability of an overdraft. The FCA found that several providers could make it easier to apply for one.

The FCA has asked account providers to review their overall approach to account denials and closures – and particularly to ensure that vulnerable consumers aren’t losing out. Providers should also ensure people aren’t denied access just because they can’t produce standard forms of ID, and make it clear which alternative forms of ID are acceptable.

Where accounts are closed or denied, the regulator has reminded providers that they should act in line with their obligations under the consumer duty, including communicating in a way that is clear and helpful for customers.

The FCA has also published independent, qualitative research on the experiences of some of the most financially excluded consumers when accessing and using financial products and services. This will help industry and consumer groups understand how the right support can help these consumers effectively access services.

Sheldon Mills, executive director of Consumers and Competition at the FCA, said:

“We’ve seen examples of really good practice – with account providers helping people access a product vital for financial inclusion – but also areas where there is room for improvement. By sharing both, we want to achieve more consistent outcomes, with people being aware of what accounts there are that might be right for them, more support for the vulnerable and people not being denied access without good reason.”

The FCA’s report also highlighted issues other organisations have experienced accessing accounts – including pawnbrokers, charities and in the adult entertainment sector. It has set out an expectation that firms should have a clear, properly considered definition of reputational risk. However, it has a limited remit to act for business and charity customers.

In 2023, the FCA said that it had not found evidence of accounts being closed due to lawfully expressed political opinions. The new report confirms it has not found any further evidence to suggest that this is happening. However, it has asked senior leaders in firms to sign an attestation taking personal responsibility for ensuring rules have been complied with and that they are confident of their compliance going forward.

FCA’s improved performance set to help UK finance sector thrive

Our Annual Report and Accounts 2023/24

Recognising the vital role that the regulator plays in enabling new financial services firms’ ability to meet regulatory standards to get off the ground, the FCA has improved its authorisation process. Now 98 percent of cases, including applications by wholesale market firms, are assessed within statutory deadlines, up from 89% in Q1 of 2022/23.

Overseas wholesale financial firms wishing to operate in the UK can also benefit from pre-application support from the FCA. The regulator has also recently completed the biggest reform to the listing rules in more than three decades. These changes support economic growth by helping firms access the capital they need to grow.

Other highlights include:

Intervening to stop harm to consumers more quickly

The FCA has continued to improve how it detects problem firms and individuals, which helps earlier intervention. For example, it doubled the cancellation of firm authorisations in 2023 to 1,261 and used its powers to intervene against 34 firms, who caused serious concerns, up 68 percent on 2022.

Improved fair complaint resolution and compensation

The FCA has taken strong action to make sure firms are compensating consumers, promptly and fairly, when things go wrong. This year it intervened with almost 100 lenders to make sure they were supporting borrowers in financial difficulty, and the FCA expects that approximately 270,000 customers will receive close to £60m in compensation.

At the same time, through its work on prevention, the Financial Services Compensation Scheme (FSCS) levy on the industry has fallen to a 10-year low.

Strong action to tackle financial crime

Since April 2023, the FCA has charged 21 people with financial crime offences which is the highest number of charges it has made in a single year. In 2023, it secured nine freezing orders, six more than in 2022, and restrained £21.1M in assets of individuals under investigation.

Protecting consumers in the crypto market

The FCA has introduced new rules that require crypto assets promotions to UK consumers to be clear, fair and not misleading. This helps consumers better understand what they are buying, and the risks involved.

Protecting consumers  

Since 31 July 2023, more than 42,000 firms must make sure they can evidence good outcomes for consumers for any new and existing ‘on sale’ products and services, and for closed ‘not on sale’ products since 31 July 2024, in line with the Consumer Duty.

Supporting innovation

The FCA continues to support innovation in financial markets, including the creation of a permanent Digital Sandbox, a testing environment that supports firms at the early stage of product development.

Ashley Alder, chair of the FCA, said:

“The report period saw the introduction of significant additions to our remit, an extension of our external accountability and an expansion of our statutory objectives. These changes, together with the introduction of the Consumer Duty, will help determine how the FCA is able to contribute to the health and success of the UK financial services sector for years to come.”

Nikhil Rathi, chief executive officer of the FCA, said:

“As we have shown this year, we are fully committed to both supporting and balancing the different needs of consumers, businesses, and the wider economy, enabling all to flourish. We recognise the importance of providing an effective and efficient authorisations service if we want the UK to be the best place in the world for financial services to thrive. We continue to play a leading role internationally by shaping the global standards on crypto, sustainability, and non-bank finance to name but a few.”

spot_img
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img
spot_img
spot_img

Caribbean News

Gang attack in Haiti’s Pont Sondé leaves 70 dead

PORT-AU-PRINCE, Haiti - An attack by a notorious gang in the town of Pont Sondé, Haiti, left at least 70 people dead on Thursday,...

Global News

Jamaica – India to strengthen bilateral ties

By Simone Hylton KINGSTON, Jamaica, (JIS) - The governments of Jamaica and the Republic of India have bolstered bilateral relations in key areas that will...